Collaborative Consumption: Un-settling the situation

By Brett

I recently attended an excellent presentation by Robin Chase, the founder of ZipCar[1], in which she described the early obstacles to implementing ZipCar in the US.[2] In this post I will focus on Professor Macomber’s Framework #3 and argue that the innovation of collaborative consumption is that it blurs or ‘moves’ situations within the matrix framed. Zipcar used a new business model specifically to unsettle the transit situation in the US, thus creating an investment opportunity.

Chase explained how the settled systems of hard and soft infrastructure—including zoning, parking, and wireless technology—stood in the way of effective collaborative consumption of rental cars. For example, ‘normal’ (non-ZipCar) renters are charged a small tax (~$10) by the state for every rental.[3] An additional $10 fee for every single Zipcar use would have been a serious blow to Chase’s business plan. Instead (with the help of a good lawyer) Zipcar builds one $10 fee into the annual membership for Massachusetts users and every subsequent use is part of the same initial rental. As this example shows, entrenched interests had settled the system in favor of their own designs and ZipCar had to disrupt the infrastructure to create a viable market for its product.

Chase’s new project is BuzzCar, a collaborative consumption model similar to RelayRides where individuals can rent out their own cars to other users in the community. The biggest obstacle here is apparently finding a workable insurance solution. Due to her public profile, Chase began working on this problem from the top down—meeting with policymakers and insurance companies. In the meantime, a disruptive innovator in Somerville started RelayRides planning to work out lingering insurance complications later. As Chase’s prominence forced her to work within the system to adjust the existing situation, Chase was undercut by a group more willing to simply ‘unsettle’ it—a strategy that had worked in her favor for ZipCar.

What does this mean for us? Of course, unsettling stable water, power, and rule of law is probably not good for sustainable cities, but ZipCar and Relayrides demonstrate how unsettling local policies and politics can be good for business and for the community. These collaborative consumption models act not in place of government, but rather to force government and entrenched interests to adjust and improve their openness. Similar thinking is part of the attraction of city ‘laboratories’ such as PlanIT Valley. The city designers attempt to create from scratch an underlying framework of unified and open digital infrastructure that removes at least some of the obstacles to disruptive innovation. Where ZipCar and RelayRides attempt to nudge (or thrust?) government towards a more open and collaborative set of policies, the designers of PlanIT Valley and other new city laboratories may hope to incorporate this from the start. Once entrepreneurs have tested their innovations in the open cities, then can better assess each target market for the obstacles that their innovations must disrupt. Of course, if RelayRides is any indication, new and disruptive innovations will eventually come along even in a city ‘laboratory.’ Hopefully the spirit of open infrastructure that pervades these new cities can make subsequent resettlement a more welcome phenomenon.